USA TODAY/AP: New-home sales plunge 9.9%, confidence drops

[highplainsdem]

http://www.usatoday.com/money/economy/housing/2005-09-27-aug-newhomes-conf_x.htm?csp=24


New-home sales plunge 9.9%, confidence drops
By Martin Crutsinger, Associated Press

WASHINGTON — Sales of new homes plunged 9.9% in August, biggest drop in nine months, as the nation's housing industry continued to flash mixed signals about whether the boom is starting to fade.

In a second report, the Conference Board said its Consumer Confidence Index, compiled from a survey of U.S. households, dropped 18.9 points in September, to 86.6, from a revised reading of 105.5 in August.

That marked the biggest fall since October 1990 when the index fell 23 points to 62.6 in the wake of the recession. The September reading was also the lowest since October 2003, when it registered 81.7.

-snip-

The report on new-home sales showed that the weakness last month was widespread around the country, led by a sharp 22% drop in the Northeast, biggest setback in that area since last December.

[Kagemusha]

1. Well at least we know there'll be a need for new homes soon.

In some regions anyway.

[CatBoreal]

3. Like the majority of people who need them...

...will be able to afford them. :(

[natrat]

2. looking forward to astonomical heating bills

[Delphinus]

4. They'll blame it on Katrina.

Or they'll redirect the focus or they'll cover it up with some bullshit and turn it into a rose.

[rbajai]

5. What the hell?

I believe that your article is accurate and true. But what the hell? Why is the Washington Post saying this:

<snip>
Concerns Raised as Home Sales, Prices Rise Again
Greenspan Issues Sternest Warning Yet to Bankers Group

By Nell Henderson
Washington Post Staff Writer
Tuesday, September 27, 2005; Page D01

U.S. home sales and prices surged again last month, an industry group reported yesterday, as Federal Reserve Chairman Alan Greenspan warned that the growing use of riskier new mortgages could result in "significant losses" for lenders and borrowers if the market cools.

http://www.washingtonpost.com/wp-dyn/content/article/2005/09/26/AR2005092601586.html?referrer=email&referrer=email

[highplainsdem]

8. Existing-home sales are up slightly, but new-home sales are the leading

indicator, or generally considered the leading indicator, because new-home sales are reported the month that the buyer signs the contract, and existing-home sales are reported when the sale closes, usually weeks and sometimes months after the sales agreement is reached. New-home sales tend to have a larger impact on the economy, too. So the combination of a drop in new-home sales and a drop in the Consumer Confidence Index is significant, even with a slight increase in the sale of existing homes.

[ender]

10. thats existing home sales...

new home sales are down, existing home sales are up... way up...

the housing market is odd, when things go well there, the new houses get most of that appreciation, while thje older houses sit around with 3-4% gains...

when a housing market goes south... new houses in new subdivisions get hit first, and hardest. The old houses, in well-established communities will at worst go neutral, but usually post better than normal gains.

what we're seeing here, is the start of that cycle.

[PurityOfEssence]

6. There were more placards out for open houses this weekend than ever

This is the Silver Lake area of Los Angeles; it's about 2 miles Northwest of downtown, midway between the city center and Hollywood. It's a nice and homey wooded area clustered around a reservoir with mostly small curvy streets in the hills, and it's a very liberal enclave. Prices here are ridiculous and just getting worse.

The point is that everyone who's thinking of selling seems to be scrambling to do so right now. Instinct says that's a sign of a peak.

Your thoughts?

[Vinnie From Indy]

7. NPR reported this morning that the median house price in CA is $570,000

When the bubble bursts it will be heard around the world.

[smirkymonkey]

9. The bubble has burst...

Even in Manhattan I am seeing more for sale signs than I ever have.